The Chancellor, Rachel Reeves, has made an unscheduled statement to Parliament today, setting out a new package of cost-of-living support measures for households and businesses.
This was not a full Budget or formal fiscal event. Instead, it was a targeted announcement in response to ongoing pressure on household and business costs, including rising fuel and energy-related prices.
While some of the measures are aimed directly at families, others may be relevant to employers, employees, hauliers, hospitality businesses, leisure businesses and certain sectors facing higher operating costs.
Fuel duty frozen
The Chancellor confirmed that there will be no increase in fuel duty this year.
The existing 5p per litre fuel duty cut will continue, which should provide some relief for motorists and businesses that rely on vehicles.
For businesses with vans, company cars, delivery vehicles or staff travelling regularly, this will be a welcome announcement, although fuel costs remain a significant overhead.
Temporary VAT cut for summer attractions
One of the more eye-catching announcements was a temporary VAT cut for certain summer attractions.
From 25 June to 1 September 2026, VAT will be reduced from 20% to 5% on qualifying summer attractions.
The Government has said this will include ticket prices for attractions such as:
- fairs
- theme parks
- zoos
- museums
- children’s cinema tickets
- children’s theatre and concert tickets
- soft play
- children’s meals in restaurants and cafés
This could be particularly relevant for businesses operating in the hospitality, leisure, tourism and family entertainment sectors.
As always, the exact detail will matter. Businesses affected by this should make sure their till systems, invoicing software and VAT reporting are updated correctly before the change takes effect.
Mileage allowance increase
The Chancellor also announced that the tax-free mileage allowance will increase by 10p per mile, backdated to April 2026.
This will be relevant where employees use their own vehicles for business journeys.
For employers, this may mean reviewing current mileage reimbursement policies and checking whether any backdated adjustments are needed.
For employees and directors who regularly travel for work, this could provide some additional support against the cost of fuel and vehicle running costs.
Food tariff suspension
The Government has also announced that tariffs will be suspended on over 100 supermarket food items.
The stated aim is to reduce pressure on food prices, with supermarkets expected to pass savings on to customers.
This is more of a household cost of living measure, but it may still be relevant for businesses where staff costs and wage expectations are being affected by wider living costs.
Free bus travel for children in August
Children aged 5 to 15 will be able to travel by bus for free across England throughout August.
This is aimed at helping families during the school holidays.
While not directly business-related for most clients, it forms part of the wider package designed to ease pressure on household budgets over the summer.
Support for hauliers and sectors with high operating costs
The Chancellor announced a 12-month road tax holiday for HGVs, worth up to £912 for a typical heavy lorry.
There will also be a reduction in red diesel duty by more than a third until the end of the year, which may benefit sectors such as farming and rail freight.
Additional funding support was also announced for the chemicals and ceramics sectors, particularly around energy costs and efficiency.
How will it be paid for?
The Government has said that part of the package will be funded by closing a tax arrangement used by some oil and gas groups involving foreign branch profits.
Further detail is expected in due course.
What does this mean for small businesses?
For most small businesses, the most relevant announcements are likely to be:
- the continued freeze in fuel duty
- the increase in mileage allowance
- the temporary VAT cut for qualifying hospitality, leisure and attraction businesses
- sector-specific support for transport, farming and energy-intensive industries
The temporary VAT reduction could create a practical admin point for some businesses, particularly those using accounting software, till systems or online booking platforms.
If your business may be affected, it will be important to make sure the correct VAT rates are applied from the right date.
Final thoughts
Although this was not a full Budget, today’s statement includes several measures that could affect businesses and households over the coming months.
Some measures are straightforward, while others — particularly the VAT changes and mileage allowance increase — may need practical action from affected businesses.
If you are unsure whether these announcements affect your business, or you need help updating your accounting systems, mileage policies or VAT treatment, please get in touch with us at Greystone Advisory.
